Aditya Birla AMC trading flat in grey market. Is a flat listing on the cards?

view original post

New Delhi: Ahead of its listing scheduled next week, Aditya Birla Sun Life AMC is commanding a miniscule premium in the grey market.

The mutual fund player has been in a turmoil, unable to keep the momentum going, despite the secondary market hovering near lifetime highs.

On Friday, Aditya Birla AMC was commanding a premium of merely Rs 27 in the unofficial market, which is less than 4 per cent of premium over the upper limit of the price band of Rs 695-712 for the issue.

Though it has marginally improved from the previous day, when the scrip was commanding a premium of Rs 20. The premium in the grey market stood at Rs 70 at the time of announcement of issue.

Dealers in the grey market said that weak response to the issue and aggressive pricing has kept the premium muted in the grey market, whereas the recent volatility in the broader markets has also jittered the sentiments.

Abhay Doshi, co-founder, UnlistedArena said that the valuations are in line with the other listed peers and the company did not leave anything on the table for the investors.

“The company is a strong long term play as mutual fund is a highly underpenetrated sector in India, but the response was muted due to high pricing,” they grey market observer added. “We see a marginal listing pop for the counter.”

The IPO of Aditya Birla Sun life AMC was open for subscription between September 29 and October 1. The issue is likely to be listed on October 11, Monday. The 2,768 crore from IPO is completely an offer for sale.

The issue was overall subscribed 5.25 times as retail and HNI investors, mostly, kept off the issue. The quota for qualified institutional investors was subscribed more than 10 times.

Echoing the similar views, Dinesh Gupta, co-founder, UnlistedZone said the company is likely to be listed as far as the issue is fully priced.

“The financial statements of the company have not shown any strong signs of growth in the last few years which failed to enthuse the investors,” he added.